To get out of the bear market, Bitcoin is poised to grow as a means of payments. But it has fallen in the hands of a technocracy which wants the ecosystem to change every interaction before it is allowed to grow again.
A financial bubble means that for an asset like Bitcoin the use as a store of value grows exponentially. The rules of math determine that this can‘t happen sustainable and that it reaches with a pace, that must seem surprisingly for human minds, the point where it is „too high.“ From here the use as a store of value decreases constrainingly. The bullmarket has become a bearmarket. To get out of it, to enspark another turn toward raising prices, there needs to be a growth in the use of the function which underlies the asset. For Bitcoin this is the p2p e-cash system.
Many technologists fail to understand this interrelation, because they ignore the ecosystem, which carries the growth of the use, or are only able to regard it as the source of an extrinsic effect on the technology, which has to be assessed by and for itself. Seen from a technical point of view, a growing use of Bitcoin causes negative effects. It makes it harder to predict the behavior of the p2p network and to guarantee the stability of a state of it defines as desired.
Bitcoin has built bubbles in 2011, 2013 and 2017. Each was followed by a bear market of declining prices. When it 2012 and 2015/17 a turnaround happened, back to growing prices, it followed an episode of a linear growth of the numbers of daily transactions, embody the growth of the use of Bitcoin by a growing ecosystem. In 2019, another growth of this metric has become impossible, because a limit of the size of the blocks restricts the number of transactions on the level already reached.
In late 2015 it was announced that the maximum size of the blocks will be doubled from 1 to 2 mb by Segregated Witness (SegWit). In term of technology, this has been achieved: Since Oktober 2017 the software is capable of processing blocks with a size of 2 and more megabyte. However, the ecosystem does not behave in a technologically desired way. Instead of adopting SegWit 100 percent, the share of SegWit transactions is still between 40 and 50 percent – 16 month after its introduction. Therefore, the capacity increase by SegWit is only 0.1 to 0.2mb (10-20%).
In early 2016 a group called Bitcoin Classic attempted to increase the maximum block size on 2mb by a hardfork, because they correctly predicted that SegWit is „too little, too late, too complicated.“ The Core devs took this as an attack or a coup, because SegWit was meant to achieve the same result in a much more elegant way. There has never been a clearer demonstration of self-centeredness and the will to lead of technologists in Bitcoin than here. The sole demand of the ecosystem to take non-technical factors into account was denounced as an attack.
There is only one way for Bitcoin to get out of the bear market: becoming more used as a payment system. This however is no longer possible in the known categories of onchain transaction volume, but exclusively by the Lightning Network, a method to process transactions in offchain channels. From a technical point of view, a lightning transaction is the same as a Bitcoin transactions: It transfers access to Bitcoin, the store of value, from one person to another. However, the behavior of a lightning transaction is fundamental different than that of a Bitcoin transactions in its fundamental configuration of economic interaction, user experience, regulatorical handling and accumulation of network effects.
Technically, the road of SegWit and Lightning is conservative: It guarantees the stability of the decentral network of nodes, which constitutes Bitcoin technologically, while building an optional infrastructure which allows high scaling and growth of use. Seen from the side of the ecosystem, Lightning demands the maximum will to self-disrupt. It transforms every economic interactions made with Bitcoin in a way, whose consequences are unpredictable for users, companies and regulators.
The result is, that Lightning made Bitcoin to an experiment with an unknown outcome. It could happen, that Lightning does what it is promised to do and reinforced the needed growth. But it could also happen that Lightning transforms the entire Bitcoin ecosystem in a failed experiment of technocracy.


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